WASHINGTON–A new report from the CFPB’s Private Education Loan Ombudsman shows that from Sept. 1, 2019 through August 31, 2020, the Bureau handled approximately 7,000 complaints related to private or federal student loans.
According to the Bureau, the numbers are an overall decrease from last year and continue a trend from 2017. More specifically, for the year ending August 31, 2020, the Bureau said it handled approximately 1,900 private student loan complaints, a decrease of approximately 33% compared to that of the previous year (2019), and for the year ending August 31, 2020, the Bureau handled approximately 5,000 federal student loan complaints, a decrease of approximately 24% compared to that of the previous year (2019).
“The overall decrease in complaints is likely not attributable to a single factor,” the CFPB said. “For example, CARES Act relief likely contributed significantly to the decrease since March 2020. However, this does not account for the steady decrease in complaints that preceded the CARES Act. Though no single factor may be responsible for the decrease, and it is difficult to quantify and assign attribution between and among potential factors.”
The Factors
Among those factors, according to the CFPB:
- Borrower education and outreach by federal and state agencies and regulators
- Borrower education and outreach by consumer advocates
- Continued maturation of some industry participants’ compliance management systems, complaint monitoring systems, and their internal consumer advocate and ombudsman offices
Remains Big Part of Debt
The Bureau said companies provided timely responses to 99% of the complaints.
The CFPB noted as a share of household debt, private and federal student loan debt is second only to home mortgage debt, with current outstanding student loan debt totaling more than $1.677 trillion. The report provides analysis of student loan complaints and the student loan market, including socio-economic and racial gaps.
To see the full report, go here.